Conservatives Propose Solutions to Help Small Businesses

April 26, 2020

FOR IMMEDIATE RELEASE

OTTAWA – Conservative Shadow Minister for Small Business James Cumming and Conservative Shadow Minister for Finance Pierre Poilievre proposed easy solutions to help small businesses access the Canada Emergency Business Account (CEBA). Poilievre also highlighted a major flaw with the government’s new commercial rental assistance program that will grind to a halt many businesses that have been operating through the COVID-19 shut down.

Canada Emergency Business Account

Senseless rules exclude many deserving businesses from the CEBA. First, under the current criteria, small businesses must have a pre-existing business account to qualify for the CEBA. Sole proprietors typically use a chequing account, rather than a business account, and thus do not qualify.

Second, businesses must have a payroll of at least $20,000 to qualify for the CEBA. Newer family-run businesses typically have no payroll because family members do all the work without salary, so they can pay off debt and build up the business instead. When family members eventually do get paid, it is through dividends, which do not count as payroll. This type of business tends to have little cash to cushion catastrophic surprises like the COVID-19 shut down.

The government can correct the shortcomings of the Canada Emergency Business Account with two simple corrections to the loan criteria:

Remove the requirement to have a business account to qualify for the CEBA.

Expand the eligibility criteria for the CEBA, to include revenue decline, so more small businesses qualify for the $40,000 loan.

Canada Emergency Commercial Rent Assistance

The government’s rental assistance will help businesses that are closed because of COVID-19. However, a design flaw will force many businesses that have remained open to close or grind their operations to a halt. The problem is that a business must have lost 70% of its revenue to qualify for the rental subsidy. Any business that has not lost that amount gets nothing, including those whose revenues have fallen by half while they stay open during COVID-19. To get rental assistance, many will need to shut down completely in order to drop their revenue by 70%. Conservatives are calling on the government to address this flaw.

“Conservatives are proposing practical solutions to rescue businesses whom governments have locked down. Governments should not punish business owners because they have the wrong type of bank account; or because they put their revenues into the company instead of paying themselves; or because they have fought through the COVID-19 lockdown to keep serving customers and employing workers,” said Shadow Minister for Finance Pierre Poilievre.

“Justin Trudeau and Bill Morneau’s rescue package’ has picked winners and losers and let entrepreneurs fall through the cracks. We have been hearing from frustrated business owners asking for flexibility in the eligibility metrics currently in place. That is the least this government can do for the private sector after forcing them to close their doors,” said Shadow Minister for Small Business James Cumming.